The effect of infrastructure and taxation on economic growth: new empirical assessment

Abstract

Purpose

The purpose of this paper is to contribute to the empirical literature that analyzes the effect of the core infrastructure (telecommunication, electricity and transportation) and indirect taxation on economic growth.

Design/methodology/approach

The authors present empirical evidence through panel data analysis based on a comprehensive sample of countries (96) over a long period of time (1976 to 2014).

Findings

The findings confirm the assumption that the core of infrastructure is essential to promote economic growth. Furthermore, indirect taxation is not a tool capable of stimulating growth. In particular, new sectors of the core of infrastructure, such as the internet and mobile telephony, are capable of expanding the effect of infrastructure on growth.

Originality/value

Based on a sample of 74 countries, we include new infrastructure sectors into the analysis (transportation, fixed telephony, mobile telephony and internet), and verify changes from the 1990s.

Citation

de Almeida, J.L. and de Mendonça, H.F. (2019), "The effect of infrastructure and taxation on economic growth: new empirical assessment", Journal of Economic Studies, Vol. 46 No. 5, pp. 1065-1082. https://doi.org/10.1108/JES-03-2018-0105